If you are buying a home for the first time, an FHA loan can make it easier. These loans come with lower minimum down payments and less-strict income and credit requirements. Most FHA-backed loan providers are willing to consider borrowers’ total financial history, rather than “deduct points” if they fall short in a particular area. However, FHA loans aren’t for everyone. Here, we will discuss some of the eligibility criteria, and you will learn how to make the application process less time-consuming.
FHA Loans Explained
Money for an FHA loan isn’t given directly to the borrower; they receive the funds from an FHA-backed lender. This means that different lenders will likely offer similar mortgage products (and reasons for denial), because FHA guidelines don’t vary by lender.
Homes Eligible for FHA Loans
In most cases, FHA-financed properties must be the borrower’s primary residence. Loans cannot be used to secure rental or investment properties. Townhomes, condos, row houses and detached dwellings in FHA-sanctioned projects are all eligible.
Credit Requirements
There are no minimum credit requirements to Get An FHA Home Loan in Allentown, PA, but those with poor credit scores may be denied based on the activities that caused the credit issues. An absence of credit history is not a reason for denial; lenders look for other payment records such as those for rent and utilities. Past foreclosures don’t disqualify borrowers as long as sufficient time has passed and the borrower has cleaned up their finances.
Employment and Income
Only provable and stable income are considered when determining eligibility for an FHA loan. Lenders prefer to see at least two years’ employment at the same job prior to an application, and borrowers should expect to keep that job for a few more years after getting the loan. However, borrowers who frequently change jobs to make more money and to advance in their fields are looked upon favorably.
The underwriting process offers FHA lenders some leeway in evaluating a borrower’s ability to repay the loan. If the situations described above don’t apply to you, it does not mean that you won’t be able to get an FHA loan. If you want to Get An FHA Home Loan in Allentown, PA, the easiest way is to consult an FHA-approved mortgage lender.
Contact Sky Financial Services Inc. For your FHA Home Loan needs.
